Quarterly Financial Information as of September 30, 2017 IFRS -
Regulated Information - Not Audited
Cegedim: revenue growth remained robust in the third quarter
of 2017
- Like-for-like revenues rose 5.9% in Q3 2017
- Business model transformation is still going strong
- Cegelease divestment under consideration
Disclaimer: This press release is available in French and in
English. In the event of any difference between the two versions,
the original French version takes precedence. This press release
may contain inside information. It was sent to Cegedim's authorized
distributor on October 26, no earlier than 5:45 pm Paris
time.The following terms "business model transformation" and
"BPO" are defined in the Glossary.To clarify which
activities are included in the Activities not allocated division,
the division has been renamed Corporate and others. The make-up of
Cegedim's divisions has not changed.IFRS 5 was not applied
as at September 30, 2017. The contributions of Cegelease and
Eurofarmat to the consolidated revenue was €8.9 million at
September 30, 2017, and €8.1 million in 9M 2016. The Q3 2017
contribution was €2.4 million, compared with €2.6 million a year
earlier. |
Conference CALL on OCTOBER 26, 2017, at 6:15PM
CET |
FR: +33 1 72 72 74 03 |
USA: +1 844 286 0643 |
UK: +44(0)207 1943 759 |
PIN
Code: 20774857# |
The webcast is available at the following
address: www.cegedim.fr/webcast |
Boulogne-Billancourt, France, October 26, 2017, after the
market close
Cegedim, an innovative technology and
services company, posted consolidated Q3 2017 revenues of €109.3
million, up 6.3% on a reported basis and 5.9% like for like
compared with the same period in 2016. Over the first nine
months of 2017, Cegedim posted consolidated revenues
of €339.9 million, up 6.8% on a reported basis and 6.3% like for
like compared with the same period in 2016.
Every division contributed to the Group's
positive like-for-like growth over the first nine months of 2017,
as compared to the year-earlier period.
Growth at the Health insurance, HR and
e-services division remained robust, with year-on-year (y/y)
increases of 10.1% in the third quarter and 9.9% over the first
nine months of 2017. Nearly all of the division's businesses
contributed to the growth.
Over the same period, the Healthcare
professionals division experienced a slight decline, with Q3
revenues down 0.5% owing to a less favorable comparison. Over the
first nine months of the year, division revenues rose 0.8% like for
like compared with the same period in 2016. This trend was chiefly
attributable to the doctor computerization business: the business
saw growth in the US, but a contraction in the UK pending the
release of a full SaaS version.
Part of this growth came from the Group's BPO
businesses, most of which are still ramping up their
operations.
The business model transformation initiated in
fall 2015 is beginning to pay off, and we expect to see the full
impact in 2018.
To continue its business model transformation
and refocus its strategy, Cegedim is considering a divestment of
its Cegelease and Eurofarmat subsidiaries. These subsidiaries
operate principally in the financial domain, are highly valued, and
require additional resources to continue pursuing and accelerating
their development for the benefit of their clients and
employees.
Revenue trends by division
To clarify which activities are included in the
Activities not allocated division, the division has been renamed
Corporate and others. The make-up of Cegedim's divisions has not
changed
- In the third quarter of 2017
|
|
Third quarter |
In €
million |
|
2017 |
2016 |
Chg. L-f-l |
Chg. Reported |
Health insurance, HR and
e-services |
|
68.0 |
60.6 |
+10.1% |
+12.1% |
Healthcare
professionals |
|
40.4 |
41.5 |
(0.5)% |
(2.6)% |
Corporate and others |
|
1.0 |
0.8 |
+24.3% |
+24.3% |
Cegedim |
|
109.3 |
102.8 |
+5.9% |
+6.3% |
In the third quarter of 2017, Cegedim posted
consolidated Group revenues of €109.3 million, up 6.3% on a
reported basis. Excluding an unfavorable currency translation
effect of 0.9% and a 1.3% boost from acquisitions, revenues rose
5.9%.
The unfavorable currency translation effect of
€1.0 million, or 0.9%, was chiefly due to the €0.7 million negative
impact of the pound sterling, which represents 10.2% of revenues,
and the €0.2 million negative impact of the US dollar, which
represents 3.1% of revenues.
The €1.3 million positive impact from
acquisitions, or 1.3%, was due to the acquisition of Futuramedia in
France in November 2016.
In like-for-like terms, the Health Insurance, HR
and e-services division's revenues rose by 10.1%, whereas the
Healthcare professionals division's revenues fell by 0.5%.
- In the first nine months of 2017
|
|
First nine months |
In €
million |
|
2017 |
2016 |
Chg. L-f-l |
Chg. Reported |
Health insurance, HR and
e-services |
|
208.1 |
185.2 |
+9.9% |
+12.4% |
Healthcare
professionals |
|
128.8 |
130.8 |
+0.8% |
(1.6)% |
Corporate and others |
|
2.9 |
2.3 |
+25.6% |
+25.6% |
Cegedim |
|
339.9 |
318.3 |
+6.3% |
+6.8% |
In the first nine months of 2017, Cegedim posted
consolidated Group revenues of €339.9 million, up 6.8% on a
reported basis. Excluding an unfavorable currency translation
effect of 1.1% and a 1.6% boost from acquisitions, revenues rose
6.3%.
The unfavorable currency translation effect of
€3.6 million, or 1.1%, was chiefly due to the €3.5 million negative
impact of the pound sterling, which represented 10.7% of
revenues.
The €5.2 million positive impact from
acquisitions, or 1.6%, was due to the acquisition of Futuramedia in
France in November 2016.
Both of the divisions grew their like-for-like
revenues. Health insurance, HR and e-services division revenues
rose by 9.9%, and Healthcare professionals division revenues rose
by 0.8%.
Analysis of business trends by division
- Health insurance, HR and e-services
The division's 9M 2017 revenues came to
€208.2 million, up 12.4% on a reported basis. The November 2016
Futuramedia acquisition in France made a positive
contribution of 2.8%. Currency translation had a negative impact of
0.2%. Like-for-like revenues rose 9.9% over the
period.The Health insurance, HR and e-services
division represented 61.3% of consolidated revenues, compared
with 58.2% over the same period a year earlier.
The division's Q3 2017 revenues came to €68.8
million, up 12.1% on a reported basis. The November 2016
Futuramedia acquisition in France made a positive
contribution of 2.1%. Currency translation had a negative impact of
0.1%. Like-for-like revenues rose 10.1% over the period.
The increase in the third quarter was chiefly
attributable to:
- Continued double-digit growth at Cegedim SRH following the
start of work with several new clients of the SaaS platform for HR
management;
- Double-digit growth in point-of-sale advertising in pharmacies
and health & wellness shops for RNP, which now has a stronger
digital offering since acquiring Futuramedia in October 2016;
- Strong sales momentum leading to the start of work with several
new clients of the SaaS platform for electronic data exchange,
Global Information Services, including payment and process
digitalization platforms. For example, Cegedim e-business again
posted double-digit revenue growth in Q3 2017;
- Double-digit growth in iGestion BPO activities for health
insurers and mutual insurers;
- Brisk momentum in the business of selling pharmaceutical sales
statistics;
- The continuation of positive trends - seen for several quarters
now - in sales of third-party payment processing services.
The gains were marginally offset by a decline in
software and services for the personal insurance market due to the
impact of switching to the SaaS format.
The division's 9M 2017 revenues came to
€128.8 million, down 1.6% on a reported basis. Currencies had a
negative impact of 2.4%. There was virtually no impact from
acquisitions or divestments. Like-for-like revenues rose 0.8% over
the period.The Healthcare professionals
division represented 37.9% of consolidated revenues, compared
with 41.1% over the same period a year earlier.The
division's Q3 2017 revenues came to €40.4 million, down 2.6% on a
reported basis. Currency translation had a negative impact of 2.1%.
There was virtually no impact from acquisitions or divestments.
Like-for-like revenues rose 0.5% over the period.
This minor dip in third-quarter revenues was
mainly the result of the doctor computerization business in the UK
pending the release of a full SaaS version. The first modules to
hit the market early this year have received excellent reviews.
This performance was offset to some extent by growth in other
computerization businesses for:
- French pharmacists, who have embraced the new Smart Rx
offering. The strong momentum in second-quarter sales continued in
the third quarter;
- Doctors in the US, Belgium and France;
- Nurses, physical therapists, speech therapists, orthoptists,
midwives and podiatrists in France;
And accelerated growth in business related to
the BCB database, an aid for prescribing and delivering medications
and other healthcare products.
The division's 9M 2017 revenues came to €2.9
million, up 25.6% on a reported and like-for-like basis. There was
no currency impact and no acquisitions or
divestments.The Corporate and others division
represented 0.9% of consolidated revenues, compared with 0.7% over
the same period a year earlier.The division's Q3 2017
revenues came to €1.0 million, up 24.3% on a reported and
like-for-like basis. There was no currency impact and no
acquisitions or divestments.
This positive trend reflects a less demanding
comparison and genuine development of the facilities management and
hosting activity, including for health records.
Highlights
Apart from the items cited below, to the best of
the company's knowledge, there were no events or changes during the
period that would materially alter the Group's financial
situation.
- Non-recourse factoring agreement
On May 22, 2017, the Group signed a factoring
agreement with a French bank. The non-recourse agreement covers
aggregated total receivables of €38.0 million. The operating units
involved in the arrangement are Cegedim SA, Cegedim Activ, Cegedim
SRH and CETIP. The factoring agreement is open-ended, but either
party may terminate it at any time, subject to a three-month notice
period.
It applies to trade receivables denominated in
euros payable by clients located in France. The amount of trade
receivables sold under the agreement came to €18.8 million at June
30, 2017.
- Partial interest rate hedging
To hedge part of its exposure to euro interest
rate fluctuations arising from its RCF, the Group carried out an
interest rate swap on February 17, 2017. Under the zero-premium
swap agreement, Cegedim receives the 1-month Euribor rate if it
exceeds 0%, receives nothing otherwise, and pays a fixed rate of
0.2680% for a notional amount of €50 million, starting on February
28, 2017, and maturing February 26, 2021.
To hedge part of its exposure to euro interest
rate fluctuations arising from its RCF, the Group carried out an
interest rate swap on May 11, 2017. Under the zero-premium swap
agreement, Cegedim receives the 1-month Euribor rate if it exceeds
0%, receives nothing otherwise, and pays a fixed rate of 0.2750%
for a notional amount of €30 million, starting on May 31, 2017, and
maturing December 31, 2020.
As part of the BPO contract Cegedim signed with
the Klesia group in September 2016, the two companies created an
economic interest group (GIE), held 50/50. In January 2017, Cegedim
lent Isiaklé €9 million for a period of 10 years at an interest
rate of 1m Euribor plus a margin of 1.1%. Isiaklé will use the loan
to purchase from Klesia a €9 million software package necessary for
it to perform its services. The GIE is accounted for in Cegedim's
consolidated accounts using the equity method.
On February 10, 2017, Cegedim was ordered to pay
€4,636,000 to the Tessi company for failing to meet certain
obligations with respect to an asset sale made on July 2, 2007.
Payment was made on July 21, 2017.
Cegedim has decided to appeal this decision. The
appeal is currently under way.
- Acquisition of B.B.M. Systems in the UK
On February 23, 2017, Cegedim acquired UK
company B.B.M. Systems through its Alliadis Europe Ltd subsidiary.
The deal strengthens the Group's expertise in developing
cloud-based products for general practitioners.
B.B.M. Systems had 2016 revenues of around €0.7
million and earned a profit. It contributes to the Group's scope of
consolidation from March 1, 2017.
- Changes to Cegedim SA's Board of Directors
In March 2017, in keeping with the wishes of
Bpifrance, Ms. Anne-Sophie Hérelle has been appointed to replace
Ms. Valérie Raoul-Desprez on the Board of Directors. The permanent
representative of Bpifrance, is now Ms. Marie Artaud-Dewitte,
Deputy Head of Legal Affairs at Bpifrance Investissements. She
replaces Ms. Anne-Sophie Hérelle.
- Acquisition of Adaptive Apps in the UK
On May 3, 2017, Cegedim acquired UK company
Adaptive Apps through its In Practice Systems Limited subsidiary.
The deal strengthens the Group's expertise in developing
cloud-based and mobile products for healthcare professionals.
Adaptive Apps had 2016 revenues of around €1.5
million and earned a profit. It contributes to the Group's scope of
consolidation from May, 2017.
Cegedim, jointly with IMS Health, is being sued
by Euris for unfair competition. Cegedim has filed a motion
claiming that IMS Health should be the sole defendant. After
consulting with its external legal counsel, the Group has decided
not to record any provisions.
- Cegelease contemplated disposal
As part of the business model transformation plan that the Group
initiated in fall 2015, Cegedim is contemplating divestment of its
Cegelease and Eurofarmat subsidiaries. These subsidiaries operate
principally in the financial domain, are highly valued, and require
additional resources to continue pursuing and accelerating their
development for the benefit of their clients and employees.
The two businesses have 24 employees in France.
In 2016 they contributed €5.4 million to Group consolidated EBITDA.
The subsidiaries' standalone EBITDA amounted to €18.1 million in
2016.
If the Group receives satisfactory offers and is
able to obtain the necessary approvals, it plans to close the deal
in the second half of 2017. The Group in no way guarantees that a
deal will be carried out.
A successful sale would give the Group a
portfolio of businesses that fit well together and generate strong
synergies. Cegedim is not planning any further divestments.
Assisting Cegedim on this transaction are the
consulting firm of Ohana & Co and the law firm of Freshfields
Bruckhaus Deringer.
Significant post-closing transactions and events
To the best of the company's knowledge, apart from the item
cited below, there were no events or changes after the accounts
were closed that would materially alter the Group's financial
situation.
On October 20, 2017, the court of Nimes ordered
Alliadis to pay a fine of €2 million as part of a case involving a
pharmacist from Remoulins, France. Cegedim has asked for the case
to be dismissed. A ruling is scheduled for November 24. The €2
million fine is the maximum currently allowed under the law
(Article 1741 of the General Tax Code in force on January 1, 2017).
But the accusations against Alliadis date back to 2007 and 2008.
The version of Article 1741 in force from January 1, 2006, to May
14, 2009, sets a maximum fine of €375,000.
Outlook
Cegedim continues to reinvent itself in 2017,
pursuing innovation and investing in the future by transforming its
business model. The business model transformation is well under
way, so growth momentum is expected to pick up in Q4 2017 and lead
to improving profitability in the future.
For 2017, Cegedim still expects:
- Like-for-like revenue growth of slightly more than 6.0%;
- EBITDA in a range of €66.0 million to €72.0 million
inclusive.
The above outlook does not reflect the potential
divestments of Cegelease and Eurofarmat.
Cegedim expects to see the full positive impact
of its investments, reorganization and transformation in 2018.
The Group does not expect any significant
acquisitions in 2017 and does not disclose earnings projections or
estimates.
- Potential impact of Brexit
In 2016, the UK accounted for 12.7% of
consolidated Group revenues and 14.8% of consolidated Group
EBIT.
Cegedim deals in local currency in the UK, as it
does in every country where it is present. Thus Brexit is unlikely
to have a material impact on Group EBIT.
With regard to healthcare policy, the Group has
not identified any major European programs at work in the UK and
expects UK policy to be only marginally affected by Brexit.
The figures cited above include guidance on
Cegedim's future financial performances. This forward-looking
information is based on the opinions and assumptions of the Group's
senior management at the time this press release is issued and
naturally entails risks and uncertainty. For more information on
the risks facing Cegedim, please refer to points 2.4, "Risk factors
and insurance", and 3.7, "Outlook", of the 2016 Registration
Document filed with the AMF on March 29, 2017, under number
D.17-0255.
|
December 11, 2017 - 2:30 to 5:45 pm CET |
8th
Investor Summit: « Cegedim DNA : A unique presence in
the connected healthcare ecosystem » |
Financial calendar
October 26, 2017, at 6:15pm (Paris
time) |
The Group will hold a conference call hosted by Jan
Eryk Umiastowski, Cegedim Chief Investment Officer and Head of
Investor Relations. The webcast is available at the following
address: www.cegedim.fr/webcast The third quarter 2017 revenue
presentation is available at: The website:
http://www.cegedim.fr/finance/documentation/Pages/presentations.aspx
The Group's financial communications app, Cegedim IR. To download
the app, visit:
http://www.cegedim.fr/finance/profil/Pages/CegedimIR.aspx |
Contact Numbers : |
France : ++33 1 72 72 74 03 United
States : +1 844 286 0643 UK and
others : +44 (0)207 1943 759 |
PIN Code: 20774857# |
Additional information
Q3
2017 revenue figures have not been audited by the Statutory
Auditor. |
Annexe
Breakdown of revenue by quarter and division
In
€ thousands |
|
Q1 |
Q2 |
Q3 |
Q4 |
Total |
Health insurance, HR and e-services |
|
68,606 |
71,650 |
67,955 |
- |
208,211 |
|
Healthcare
professionals |
|
44,045 |
44,334 |
40,383 |
- |
128,762 |
|
Corporate and others |
|
1,054 |
930 |
957 |
- |
2,940 |
|
Cegedim |
|
113,705 |
116,913 |
109,294 |
- |
339,912 |
|
In
€ thousands |
|
Q1 |
Q2 |
Q3 |
Q4 |
Total |
Health insurance, HR and e-services |
|
59,728 |
64,847 |
60,607 |
77,143 |
262,325 |
|
Healthcare
professionals |
|
45,687 |
43,676 |
41,459 |
44,404 |
175,226 |
|
Corporate and others |
|
793 |
778 |
770 |
954 |
3,295 |
|
Cegedim |
|
106,208 |
109,301 |
102,836 |
122,501 |
440,846 |
|
Breakdown of revenue by geographic zone and division
In
€ thousands |
|
France |
EMEA excl. France |
Americas |
APAC |
Health insurance, HR and e-services |
|
97.0% |
3.0% |
- |
- |
Healthcare
professionals |
|
60.9% |
30.1% |
9.0% |
- |
Corporate and others |
|
99.7% |
0.3% |
- |
- |
Cegedim |
|
83.3% |
13.3% |
3.4% |
- |
Breakdown of revenue by currency and division
In
€ thousands |
|
Euro |
GBP |
USD |
Others |
Health insurance, HR and e-services |
|
97.0% |
1.9% |
- |
1.1% |
Healthcare
professionals |
|
65.0% |
25.0% |
8.8% |
1.2% |
Corporate and others |
|
100.0% |
- |
- |
0.0% |
Cegedim |
|
84.9% |
10.7% |
3.3% |
1.1% |
BPO
(Business Process Outsourcing): BPO is the contracting of
non-core business activities and functions to a third-party
provider. Cegedim provides BPO services for human resources,
Revenue Cycle Management in the US and management services for
insurance companies, provident institutions and mutual insurers.
Business model transformation: Cegedim decided in fall 2015
to switch all of its offerings over to SaaS format, to develop a
complete BPO offering, and to materially increase its R&D
efforts. This is reflected in the Group's revamped business model.
The change has altered the Group's revenue recognition and
negatively affected short-term profitability Corporate and
others: This division encompasses the activities the Group
performs as the parent company of a listed entity, as well as the
support it provides to the three operating divisions. EPS:
Earnings Per Share is a specific financial indicator defined by the
Group as the net profit (loss) for the period divided by the
weighted average of the number of shares in circulation.
Operating expenses: Operating expenses is defined as
purchases used, external expenses and payroll costs. Revenue at
constant exchange rate: When changes in revenue at constant
exchange rate are referred to, it means that the impact of exchange
rate fluctuations has been excluded. The term "at constant exchange
rate" covers the fluctuation resulting from applying the exchange
rates for the preceding period to the current fiscal year, all
other factors remaining equal. Revenue on a like-for-like
basis: The effect of changes in scope is corrected by restating
the sales for the previous period as follows: by removing the
portion of sales originating in the entity or the rights acquired
for a period identical to the period during which they were held to
the current period; similarly, when an entity is transferred, the
sales for the portion in question in the previous period are
eliminated. Life-for-like data (L-f-l): At constant scope
and exchange rates. Internal growth: Internal growth covers
growth resulting from the development of an existing contract,
particularly due to an increase in rates and/or the volumes
distributed or processed, new contracts, acquisitions of assets
allocated to a contract or a specific project. |
|
External growth: External growth covers acquisitions during
the current fiscal year, as well as those which have had a partial
impact on the previous fiscal year, net of sales of entities and/or
assets. EBIT: Earnings Before Interest and Taxes. EBIT
corresponds to net revenue minus operating expenses (such as
salaries, social charges, materials, energy, research, services,
external services, advertising, etc.). It is the operating income
for the Cegedim Group. EBIT before special items: This is
EBIT restated to take account of non-current items, such as losses
on tangible and intangible assets, restructuring, etc. It
corresponds to the operating income from recurring operations for
the Cegedim Group. EBITDA: Earnings before interest, taxes,
depreciation and amortization. EBITDA is the term used when
amortization or depreciation and revaluations are not taken into
account. "D" stands for depreciation of tangible assets (such as
buildings, machines or vehicles), while "A" stands for amortization
of intangible assets (such as patents, licenses and goodwill).
EBITDA is restated to take account of non-current items, such as
losses on tangible and intangible assets, restructuring, etc. It
corresponds to the gross operating earnings from recurring
operations for the Cegedim Group. Adjusted EBITDA :
Consolidated EBITDA adjusted, for 2016, for the €4.0m of
negative impact from impairment of receivables in the Healthcare
Professional division Net Financial Debt: This represents
the Company's net debt (non-current and current financial debt,
bank loans, debt restated at amortized cost and interest on loans)
net of cash and cash equivalents and excluding revaluation of debt
derivatives. Free cash flow: Free cash flow is cash
generated, net of the cash part of the following items: (i) changes
in working capital requirements, (ii) transactions on equity
(changes in capital, dividends paid and received), (iii) capital
expenditure net of transfers, (iv) net financial interest paid and
(v) taxes paid. EBIT margin: EBIT margin is defined as the
ratio of EBIT/revenue. EBIT margin before special
items: EBIT margin before special items is defined as the ratio
of EBIT before special items/revenue. Net cash: Net cash is
defined as cash and cash equivalent minus overdraft. |
Glossary
About
Cegedim: Founded in 1969, Cegedim is an innovative technology and
services company in the field of digital data flow management for
healthcare ecosystems and B2B, and a business software publisher
for healthcare and insurance professionals. Cegedim employs more
than 4,000 people in 11 countries and generated revenue of €441
million in 2016. Cegedim SA is listed in Paris (EURONEXT: CGM).To
learn more, please visit: www.cegedim.comAnd follow Cegedim on
Twitter: @CegedimGroup, LinkedIn and Facebook. |
Aude
BalleydierCegedim Media Relations and Communications
ManagerTel.: +33 (0)1 49 09 68 81aude.balleydier@cegedim.com |
Jan Eryk
UmiastowskiCegedimChief Investment Officerand head of
Investor RelationsTel.: +33 (0)1 49 09 33
36janeryk.umiastowski@cegedim.com |
Marina RosoffFor
Madis Phileo Media RelationsTel: +33 (0)6 71 58
00 34marina@madisphileo.com |
Follow Cegedim:
|
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